The TRY/JPY pair is a market that I love to trade. The swap is absolutely brilliant on the upside if you get the opportunity to take advantage of it. However, I think that we’re going to consolidate for the most part during the month of April. On this chart, I have a yellow box representing where I believe the market will be involved. The 45 level has been supportive in the past, and should continue to be so in the near term. I also recognize that the 47 level above has been rather resistive and should continue to be so in the near term. In other words, I think it’s more of the same and although there isn’t much of a chance for the carry trade, the market truly has enough room to run in order to make this viable.
[CAD:FXAcademy CTA #121]Selling rallies
I think the entire month of April is going to be very consolidative as far as currency markets are concerned. I don’t think this pair is going to be any different but I do favor the downside. If we managed to break down below 45, I would of course be a heavy seller but I don’t know that that’s going to happen. In fact, I think that we just simply sit still. I think that there are opportunities to sell rallies on short-term charts, but quite frankly I would not want to hang onto a trade for any real length of time.
As far as buying is concerned, it’s going to be very difficult to do until we get above the 49 handle. Once we do, the market should continue to go much higher, but it’s going to take a Herculean effort to do that. I think that we remain somewhat soft and somewhat negative, but there will be bounces from time to time. I believe that a lot of things will continue to weigh upon the Turkish lira, not the least of which is all of the military action going on next door.
